GP Batteries International

[mrEngineer]

Ok point taken. I wonder how much would this rights issue cost.. at the expense to buy cheaper shares..

[Ken123456]

I read the annoucement from Q3 that vectrix incur impairment loss. Didnt see anywhere that vectrix has been sold. If sold, there should also be announcement on the consideration.

Please guide me if it sold indeed

Hi Ken,

Base on my understanding Vectrix group is in the process of winding down and not sold yet. Hopefully, the 45% owned Vectrix Group will be sold to the other partners.

"The Vectrix Group failed to raise additional capital. The other shareholders of Vectrix decided not to fund the projects further because of significant cost overrun and their commercial viability. The Group did not have the required resources to continue the projects alone. Accordingly, Vectrix’s management team was in the process of discussing with concerned parties to wind down its operations. As a result, the Group fully provided for its investment in and receivables from Vectrix Group of companies."

Some news of Vectrix from the net.

"Shutdown of US operations
According to a Spanish news magazine, by January 2014 Vectrix will cease all US operations.[2] After numerous manufacturing problems resulting in failed batteries and nonfunctioning scooters, Vectrix's parent company Gold Peak, a Chinese battery manufacturer, decided to close down all Vectrix's US facilities as of December 31, 2013.[2] The report indicates that Vectrix will maintain its Poland fabrication plant in order to continue to supply parts for its joint venture with Daimler's Smart division.[2]"

http://en.wikipedia.org/wiki/Vectrix#cit..._digital-2

Hi ngcheeki,

Thank for the information. Ultimately, i believe once vectrix is sold, there will be another adjustment on gain/loss from the disposal.

Can anyone confirm for me that if they reach the recent 50% holding, GPI will need to give an offer to the public??? Is it because right is not finalise that why there are no amnouncent?

For the reason of issuing right, my guess is they decided to privatise GPB by acquring as much excess as possible and give out bad news of impairment loss for vetrix to lower down the market share price. Right issue also give a hugh discount of 0.485 and 1 for 2 instead of 1 for 1.
Haha my guess only.

[ngcheeki]

I read the annoucement from Q3 that vectrix incur impairment loss. Didnt see anywhere that vectrix has been sold. If sold, there should also be announcement on the consideration.

Please guide me if it sold indeed

Hi Ken,

Base on my understanding Vectrix group is in the process of winding down and not sold yet. Hopefully, the 45% owned Vectrix Group will be sold to the other partners.

"The Vectrix Group failed to raise additional capital. The other shareholders of Vectrix decided not to fund the projects further because of significant cost overrun and their commercial viability. The Group did not have the required resources to continue the projects alone. Accordingly, Vectrix’s management team was in the process of discussing with concerned parties to wind down its operations. As a result, the Group fully provided for its investment in and receivables from Vectrix Group of companies."

Some news of Vectrix from the net.

"Shutdown of US operations
According to a Spanish news magazine, by January 2014 Vectrix will cease all US operations.[2] After numerous manufacturing problems resulting in failed batteries and nonfunctioning scooters, Vectrix's parent company Gold Peak, a Chinese battery manufacturer, decided to close down all Vectrix's US facilities as of December 31, 2013.[2] The report indicates that Vectrix will maintain its Poland fabrication plant in order to continue to supply parts for its joint venture with Daimler's Smart division.[2]"

http://en.wikipedia.org/wiki/Vectrix#cit..._digital-2

Hi ngcheeki,

Thank for the information. Ultimately, i believe once vectrix is sold, there will be another adjustment on gain/loss from the disposal.

Can anyone confirm for me that if they reach the recent 50% holding, GPI will need to give an offer to the public??? Is it because right is not finalise that why there are no amnouncent?

For the reason of issuing right, my guess is they decided to privatise GPB by acquring as much excess as possible and give out bad news of impairment loss for vetrix to lower down the market share price. Right issue also give a hugh discount of 0.485 and 1 for 2 instead of 1 for 1.
Haha my guess only.

Hi Ken,

In the take-over code for companies, there is no requirement for companies to make mandatory offer when cross 50%. In fact, once crossed 50%, GP Batteries can acquire as many share as they like. The following is extracted from the GP Batteries OIS document.

GPB OIS wrote:
The Company is incorporated in the Republic of Singapore, and is subject to Sections 138, 139 and 140 of the SFA and the Code. The Code regulates the acquisition of ordinary shares of public companies, including the Company. Unless exempted, any person acquiring an interest, either on his own or together with parties acting in concert with him, in 30.0%or more of the voting rights in the Company or if such person holds, either on his own or together with parties acting in concert with him, between 30.0% to 50.0% (both inclusive) of the voting rights in the Company, and acquires additional Shares representing more than 1.0% of the voting rights in the Company in any six-month period, must extend a take-over offer for the remaining Shares in the Company in accordance with the provisions of the Code.

Shareholders who are in doubt as to their obligations, if any, to make a mandatory take-over offer under the Code as a result of any acquisition of Rights Shares pursuant to the Rights Issue should consult the Securities Industry Council of Singapore and/or their professional advisers.

As at the Latest Practicable Date, GPIL holds 54,616,096 Shares, representing approximately 49.71% of the shareholdings in the Company. Consequently, by acquiring less than 1.0% of the shareholdings in the Company, GPIL will be able to hold more than 50% of the shareholdings in the Company and not be required to extend a take-over offer for the remaining voting shares of the Company."

As for the privatize theory by GP Batteries, a few of the experts here are guessing that's their ultimate intention too

[freedom]

privatization is a fat hope. GP has owned more than 80% of GPI, and GPI has not been privatized. GPI only owns a bit above 50%. It's a long way to reach 80%, a even longer way to privatization.

[Ken123456]

Hi ngcheeki,

Thanks for the information.

[thefarside]

GP has owned more than 80% of GPI, and GPI has not been privatized.

Well, GPI is not exactly a dividend generator. You would want to privatise the main source of the cash, rather than the holding company without increasing your share of the cash flow.

Anyway, you are right that it is still a long way from 80%. If I am GPI I will hope that the rights take up is bad - then I can mop up the excess and raise my % without too much fuss.

[freedom]

During the whole year of 2013, the total volume was 8,259,000(data from yahoo finance). In the first 2 months of 2014, the total volume is already 5,681,000(as of yesterday, data from yahoo finance). Right after the OIS was released, GPI has been mopping the shares and rights from open market. Not mentioned that the shares that some investors will sell immediately when rights issue is announced and the rights the investors are not going to take up.

The whole rights exercise is a great way for the majority shareholders to take advantage of the minority shareholders. Yet, minority shareholders expect to get a fair privatization deal? Maybe only in dream?

[freedom]

GP has owned more than 80% of GPI, and GPI has not been privatized.

Well, GPI is not exactly a dividend generator. You would want to privatise the main source of the cash, rather than the holding company without increasing your share of the cash flow.

Anyway, you are right that it is still a long way from 80%. If I am GPI I will hope that the rights take up is bad - then I can mop up the excess and raise my % without too much fuss.

GPI has better cash flow, balance sheet and earning outlook than GP Bat in the recent years. Privatization is not really about cash generation, rather the cost vs the cash obtained. If it only costs 1 cent in privatization to get 10 cents of cash, I would do it any day, any time though 10 cents is really not much cash.

[cif5000]

The whole rights exercise is a great way for the majority shareholders to take advantage of the minority shareholders. Yet, minority shareholders expect to get a fair privatization deal? Maybe only in dream?

From another perspective, it was the minority shareholders who determined the market valuation. It wouldn't be fair for the net worth of major shareholders to be decimated by a few minority shareholders.

The company however had been paying regular dividend. Not too unfair to all the shareholders.

[freedom]

The whole rights exercise is a great way for the majority shareholders to take advantage of the minority shareholders. Yet, minority shareholders expect to get a fair privatization deal? Maybe only in dream?

From another perspective, it was the minority shareholders who determined the market valuation. It wouldn't be fair for the net worth of major shareholders to be decimated by a few minority shareholders.

The company however had been paying regular dividend. Not too unfair to all the shareholders.

I didn't claim that the majority shareholders are unfair towards minority shareholders in dividend payment. But the rights exercise is to exploit certain minority shareholders. I don't blame them either because certain minority shareholders are exploitable and the majority shareholders offered a fair way for intelligent minority shareholders. Everyone is working for their own interests and no one should simply expect other parties to look after his/her interest. But to expect a good privatization deal is a fat hope in my opinion.